(B) by inserting after subsection (d) the following new subsection
(e):

`(e)(1) Whoever in interstate or foreign commerce in or through
the World Wide Web is engaged in the business of the commercial
distribution of material that is harmful to minors shall restrict
access to such material by persons under 17 years of age.

`(2) Any person who violates paragraph (1) shall be fined not more
than $50,000, imprisoned not more than six months, or both.

`(3) In addition to the penalties under paragraph (2), whoever
intentionally violates paragraph (1) shall be subject to a fine of
not more than $50,000 for each violation. For purposes of this
paragraph, each day of violation shall constitute a separate
violation.

`(4) In addition to the penalties under paragraphs (2) and (3),
whoever violates paragraph (1) shall be subject to a civil fine of
not more than $50,000 for each violation. For purposes of this
paragraph, each day of violation shall constitute a separate
violation.

`(5) It is an affirmative defense to prosecution under this
subsection that the defendant restricted access to material that is
harmful to minors by persons under 17 years of age by requiring use
of a verified credit card, debit account, adult access code, or adult
personal identification number or in accordance with such other
procedures as the Commission may prescribe.

`(6) This subsection may not be construed to authorize the
Commission to regulate in any manner the content of any information
provided on the World Wide Web.

`(7) For purposes of this subsection:

`(A) The term `material that is harmful to minors' means any
communication, picture, image, graphic image file, article,
recording, writing, or other matter of any kind that--

`(i) taken as a whole and with respect to minors, appeals to a
prurient interest in nudity, sex, or excretion;

`(ii) depicts, describes, or represents, in a patently offensive
way with respect to what is suitable for minors, an actual or
simulated sexual act or sexual contact, actual or simulated normal or
perverted sexual acts, or a lewd exhibition of the genitals; and

`(B) The terms `sexual act' and `sexual contact' have the meanings
assigned such terms in section 2246 of title 18, United States
Code.'.

(2) Conforming amendment: Subsection (h) of such section, as so
redesignated, is amended by striking `(e), or (f)' and inserting
`(f), or (g)'.

(b) Availability on Internet of Definition of Material That Is
Harmful to Minors: The Attorney General, in the case of the Internet
web site of the Department of Justice, and the Federal Communications
Commission, in the case of the Internet web site of the Commission,
shall each post or otherwise make available on such web site such
information as is necessary to inform the public of the meaning of
the term `material that is harmful to minors' under section 223(e) of
the Communications Act of 1934, as amended by subsection (a) of this
section.

SECTION 1. NO UNIVERSAL SERVICE FOR SCHOOLS OR LIBRARIES THAT FAIL
TO IMPLEMENT A FILTERING OR BLOCKING SYSTEM FOR COMPUTERS WITH
INTERNET ACCESS.

(a) In General: Section 254 of the Communications Act of 1934 (47
U.S.C. 254) is amended by adding at the end thereof the following:
`(l) Implementation of a Filtering or Blocking System:

`(1) In general: No services may be provided under subsection
(h)(1)(B) to any elementary or secondary school, or any library,
unless it provides the certification required by paragraph (2) or
(3), respectively.

`(2) Certification for schools: Before receiving universal service
assistance under subsection (h)(1)(B), an elementary or secondary
school (or the school board or other authority with responsibility
for administration of that school) shall certify to the Commission
that it has--

`(A) selected a system for computers with Internet access to
filter or block matter deemed to be inappropriate for minors; and

`(B) installed, or will install as soon as it obtains computers
with Internet access, a system to filter or block such matter.

`(3) Certification for libraries: Before receiving universal
service assistance under subsection (h)(1)(B), a library that has a
computer with Internet access shall certify to the Commission that,
on one or more of its computers with Internet access, it employs a
system to filter or block matter deemed to be inappropriate for
minors. If a library that makes a certification under this paragraph
changes the system it employs or ceases to employ any such system, it
shall notify the Commission within 10 days after implementing the
change or ceasing to employ the system.

`(4) Local determination of content: For purposes of paragraphs
(2) and (3), the determination of what matter is inappropriate for
minors shall be made by the school, school board, library or other
authority responsible for making the required certification. No
agency or instrumentality of the United States Government may--

`(A) establish criteria for making that determination;

`(B) review the determination made by the certifying school,
school board, library, or other authority; or

`(C) consider the criteria employed by the certifying school,
school board, library, or other authority in the administration of
subsection (h)(1)(B).'.

(b) Conforming Change: Section 254(h)(1)(B) of the Communications
Act of 1934 (47 U.S.C. 254(h)(1)(B)) is amended by striking `All
telecommunications' and inserting `Except as provided by subsection
(l), all telecommunications'.

KYL (AND BRYAN) AMENDMENT NO. 3266
(Senate - July 22, 1998)

Mr. KYL (for himself and Mr. Bryan) proposed an amendment to the
bill, S. 2260, supra; as follows: At the appropriate place, insert
the following:

SEC. XX. PROHIBITION ON INTERNET GAMBLING.

(a) Short Title: This section may be cited as the `Internet
Gambling Prohibition Act of 1998'.

(b) Definitions: Section 1081 of title 18, United States Code, is
amended--

(1) in the matter immediately following the colon, by designating
the first 5 undesignated paragraphs as paragraphs (1) through (5),
respectively, and indenting each paragraph 2 ems to the right; and

(2) by adding at the end the following:

`(6) Bets or wagers: The term `bets or wagers'--

`(A) means the staking or risking by any person of something of
value upon the outcome of a contest of others, sporting event of
others, or of any game of chance, upon an agreement or understanding
that the person or another person will receive something of value
based on that outcome;

`(B) includes the purchase of a chance or opportunity to win a
lottery or other prize (which opportunity to win is predominantly
subject to chance);

`(C) includes any scheme of a type described in section 3702 of
title 28, United States Code; and

`(D) does not include--

`(i) a bona fide business transaction governed by the securities
laws (as that term is defined in section 3(a)(47) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(47))) for the purchase or sale
at a future date of securities (as that term is defined in section
3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)(10)));

`(ii) a transaction on or subject to the rules of a contract
market designated pursuant to section 5 of the Commodity Exchange Act
(7 U.S.C. 7);

`(iii) a contract of indemnity or guarantee; or

`(iv) a contract for life, health, or accident insurance.

`(7) Foreign jurisdiction: The term `foreign jurisdiction' means a
jurisdiction of a foreign country or political subdivision thereof.

`(8) Information assisting in the placing of a bet or wager: The
term `information assisting in the placing of a bet or wager'--

`(A) means information that is intended by the sender or recipient
to be used by a person engaged in the business of betting or wagering
to accept or place a bet or wager; and

`(B) does not include--

`(i) information concerning parimutuel pools that is exchanged
between or among 1 or more racetracks or other parimutuel wagering
facilities licensed by the State or approved by the foreign
jurisdiction in which the facility is located, and 1 or more
parimutuel wagering facilities licensed by the State or approved by
the foreign jurisdiction in which the facility is located, if that
information is used only to conduct common pool parimutuel pooling
under applicable law;

`(ii) information exchanged between or among 1 or more racetracks
or other parimutuel wagering facilities licensed by the State or
approved by the foreign jurisdiction in which the facility is
located, and a support service located in another State or foreign
jurisdiction, if the information is used only for processing bets or
wagers made with that facility under applicable law;

`(iii) information exchanged between or among 1 or more wagering
facilities that are located within a single State and are licensed
and regulated by that State, and any support service, wherever
located, if the information is used only for the pooling or
processing of bets or wagers made by or with the facility or
facilities under applicable State law;

`(iv) any news reporting or analysis of wagering activity,
including odds, racing or event results, race and event schedules, or
categories of wagering; or

`(v) any posting or reporting of any educational information on
how to make a bet or wager or the nature of betting or wagering.'.
(c) Prohibition on Internet Gambling:

(1) In general: Chapter 50 of title 18, United States Code, is
amended by adding at the end the following:

`1085. Internet gambling

`(a) Definitions: In this section:

`(1) Closed-loop subscriber-based service: The term `closed-loop
subscriber-based service' means any information service or system
that uses--

`(A) a device or combination of devices--

`(i) expressly authorized and operated in accordance with the laws
of a State for the purposes described in subsection (e); and

`(ii) by which a person located within a State must subscribe to
be authorized to place, receive, or otherwise make a bet or wager,
and must be physically located within that State in order to be
authorized to do so;

`(B) a customer verification system to ensure that all applicable
Federal and State legal and regulatory requirements for lawful
gambling are met; and

`(2) Gambling business: The term `gambling business' means a
business that is conducted at a gambling establishment, or that--

`(A) involves--

`(i) the placing, receiving, or otherwise making of bets or
wagers; or

`(ii) offers to engage in placing, receiving, or otherwise making
bets or wagers;

`(B) involves 1 or more persons who conduct, finance, manage,
supervise, direct, or own all or part of such business; and

`(C) has been or remains in substantially continuous operation for
a period in excess of 10 days or has a gross revenue of $2,000 or
more during any 24-hour period.

`(3) Interactive computer service: The term `interactive computer
service' means any information service, system, or access software
provider that uses a public communication infrastructure or operates
in interstate or foreign commerce to provide or enable computer
access by multiple users to a computer server, including specifically
a service or system that provides access to the Internet.

`(4) Internet: The term `Internet' means the international
computer network of both Federal and non-Federal interoperable packet
switched data networks.

`(5) Person: The term `person' means any individual, association,
partnership, joint venture, corporation, State or political
subdivision thereof, department, agency, or instrumentality of a
State or political subdivision thereof, or any other government,
organization, or entity.

`(6) Private network: The term `private network' means a
communications channel or channels, including voice or computer data
transmission facilities, that use either--

`(A) private dedicated lines; or

`(B) the public communications infrastructure, if the
infrastructure is secured by means of the appropriate private
communications technology to prevent unauthorized access.

`(7) State: The term `State' means a State of the United States,
the District of Columbia, the Commonwealth of Puerto Rico, or a
commonwealth, territory, or possession of the United States.

`(b) Gambling:

`(1) Prohibition: Subject to subsection (e), it shall be unlawful
for a person knowingly to use the Internet or any other interactive
computer service--

`(A) to place, receive, or otherwise make a bet or wager with any
person; or

`(B) to send, receive, or invite information assisting in the
placing of a bet or wager with the intent to send, receive, or invite
information assisting in the placing of a bet or wager.

`(2) Penalties: A person who violates paragraph (1) shall be--

`(A) fined in an amount that is not more than the greater of--

`(i) three times the greater of--

`(I) the total amount that the person is found to have wagered
through the Internet or other interactive computer service; or

`(II) the total amount that the person is found to have received
as a result of such wagering; or

`(ii) $500;

`(B) imprisoned not more than 3 months; or

`(C) both. `(c) Gambling Businesses:

`(1) Prohibition: Subject to subsection (e), it shall be unlawful
for a person engaged in a gambling business knowingly to use the
Internet or any other interactive computer service--

`(A) to place, receive, or otherwise make a bet or wager; or

`(B) to send, receive, or invite information assisting in the
placing of a bet or wager.

`(2) Penalties: A person engaged in a gambling business who
violates paragraph (1) shall be--

`(A) fined in an amount that is not more than the greater of--

`(i) the amount that such person received in bets or wagers as a
result of engaging in that business in violation of this subsection;
or

`(ii) $20,000;

`(B) imprisoned not more than 4 years; or

`(C) both. `(d) Permanent Injunctions: Upon conviction of a person
under this section, the court may, as an additional penalty, enter a
permanent injunction enjoining the transmission of bets or wagers or
information assisting in the placing of a bet or wager.

`(e) Exceptions:

`(1) In general: Subject to paragraph (2), the prohibitions in
this section shall not apply to any--

`(A) otherwise lawful bet or wager that is placed, received, or
otherwise made wholly intrastate for a State lottery or a racing or
parimutuel activity, or a multi-State lottery operated jointly
between 2 or more States in conjunction with State lotteries, (if the
lottery or activity is expressly authorized, and licensed or
regulated, under applicable Federal or State law) on--

`(i) an interactive computer service that uses a private network,
if each person placing or otherwise making that bet or wager is
physically located at a facility that is open to the general public;
or

`(ii) a closed-loop subscriber-based service that is wholly
intrastate; or

`(B) otherwise lawful bet or wager for class II or class III
gaming (as defined in section 4 of the Indian Gaming Regulatory Act
(25 U.S.C. 2703)) that is placed, received, or otherwise made on a
closed-loop subscriber-based service or an interactive computer
service that uses a private network, if--

`(i) each person placing, receiving, or otherwise making that bet
or wager is physically located on Indian land; and

`(ii) all games that constitute class III gaming are conducted in
accordance with an applicable Tribal-State compact entered into under
section 11(d) of the Indian Gaming Regulatory Act (25 U.S.C. 2701(d))
by a State in which each person placing, receiving, or otherwise
making that bet or wager is physically located.

`(2) Inapplicability of exception to bets or wagers made by agents
or proxies: An exception under subparagraph (A) or (B) of paragraph
(1) shall not apply in any case in which a bet or wager is placed,
received, or otherwise made by the use of an agent or proxy using the
Internet or an interactive computer service. Nothing in this
paragraph shall be construed to prohibit the owner operator of a
parimutuel wagering facility that is licensed by a State from
employing an agent in the operation of the account wagering system
owned or operated by the parimutuel facility.

`(f) State Law: Nothing in this section shall be construed to
create immunity from criminal prosecution or civil liability under
the law of any State.'.

(2) Technical amendment: The analysis for chapter 50 of title 18,
United States Code, is amended by adding at the end the following:

`1085. Internet gambling.'.

(d) Civil Remedies:

(1) In general: The district courts of the United States shall
have original and exclusive jurisdiction to prevent and restrain
violations of section 1085 of title 18, United States Code, as added
by this section, by issuing appropriate orders.

(2) Proceedings:

(A) Institution by federal government: The United States may
institute proceedings under this section. Upon application of the
United States, the district court may enter a temporary restraining
order or an injunction against any person to prevent a violation of
section 1085 of title 18, United States Code, as added by this
section, if the court determines, after notice and an opportunity for
a hearing, that there is a substantial probability that such
violation has occurred or will occur.

(B) Institution by state attorney general:

(i) In general: Subject to subclause (ii), the attorney general of
a State (or other appropriate State official) in which a violation of
section 1085 of title 18, United States Code, as added by this
section, is alleged to have occurred, or may occur, after providing
written notice to the United States, may institute proceedings under
this subsection. Upon application of the attorney general (or other
appropriate State official) of the affected State, the district court
may enter a temporary restraining order or an injunction against any
person to prevent a violation of section 1085 of title 18, United
States Code, as added by this section, if the court determines, after
notice and an opportunity for a hearing, that there is a substantial
probability that such violation has occurred or will occur.

(ii) Indian lands: With respect to a violation of section 1085 of
title 18, United States Code, as added by this section, that is
alleged to have occurred, or may occur, on Indian lands (as defined
in section 4 of the Indian Gaming Regulatory Act (25 U.S.C. 2703)),
the enforcement authority under clause (i) shall be limited to the
remedies under the Indian Gaming Regulatory Act (25 U.S.C. 2701 et
seq.), including any applicable Tribal-State compact negotiated under
section 11 of that Act (25 U.S.C. 2710).

(C) Orders and injunctions against internet service providers:
Notwithstanding subparagraph (A) or (B), the following rules shall
apply in any proceeding instituted under this paragraph in which
application is made for a temporary restraining order or an
injunction against an interactive computer service:

(i) Scope of relief:

(I) If the violation of section 1085 of title 18, United States
Code, originates with a customer of the interactive computer
service's system or network, the court may require the service to
terminate the specified account or accounts of the customer, or of
any readily identifiable successor in interest, who is using such
service to place, receive or otherwise make a bet or wager, engage in
a gambling business, or to initiate a transmission that violates such
section 1085.

(II) Any other relief ordered by the court shall be technically
feasible for the system or network in question under current
conditions, reasonably effective in preventing a violation of section
1085, of title 18, United States Code, and shall not unreasonably
interfere with access to lawful material at other online locations.

(III) No relief shall issue under clause (i)(II) if the
interactive computer service demonstrates, after an opportunity to
appear at a hearing, that such relief is not economically reasonable
for the system or network in question under current conditions.

(ii) Considerations: In the case of an application for relief
under clause (i)(II), the court shall consider, in addition to all
other factors that the court shall consider in the exercise of its
equitable discretion, whether--

(I) such relief either singularly or in combination with such
other injunctions issued against the same service under this
paragraph, would seriously burden the operation of the service's
system or network compared with other comparably effective means of
preventing violations of section 1085 of title 18, United States
Code;

(II) in the case of an application for a temporary restraining
order or an injunction to prevent a violation of section 1085 of
title 18, United States Code, by a gambling business (as is defined
in such section 1085) located outside the United States, the relief
is more burdensome to the service than taking comparably effective
steps to block access to specific, identified sites used by the
gambling business located outside the United States; and

(III) in the case of an application for a temporary restraining
order or an injunction to prevent a violation of section 1085 of
title 18, United States Code, as added by this section, relating to
material or activity located within the United States, whether less
burdensome, but comparably effective means are available to block
access by a customer of the service's system or network to
information or activity that violates such section 1085.

(iii) Findings: In any order issued by the court under this
paragraph, the court shall set forth the reasons for its issuance,
shall be specific in its terms, and shall describe in reasonable
detail, and not by reference to the complaint or other document, the
act or acts sought to be restrained and the general steps to be taken
to comply with the order.

(D) Expiration: Any temporary restraining order or preliminary
injunction entered pursuant to this paragraph shall expire if, and as
soon as, the United States, or the attorney general (or other
appropriate State official) of the State, as applicable, notifies the
court that issued the injunction that the United States or the State,
as applicable, will not seek a permanent injunction.

(3) Expedited proceedings:

(A) In general: In addition to proceedings under paragraph (2), a
district court may enter a temporary restraining order against a
person alleged to be in violation of section 1085 of title 18, United
States Code, as added by this section, upon application of the United
States under paragraph (2)(A), or the attorney general (or other
appropriate State official) of an affected State under paragraph
(2)(B), without notice and the opportunity for a hearing, if the
United States or the State, as applicable, demonstrates that there is
probable cause to believe that the transmission at issue violates
section 1085 of title 18, United States Code, as added by this
section.

(B) Expiration: A temporary restraining order entered under this
paragraph shall expire on the earlier of--

(i) the expiration of the 30-day period beginning on the date on
which the order is entered; or

(ii) the date on which a preliminary injunction is granted or
denied.

(C) Hearings: A hearing requested concerning an order entered
under this paragraph shall be held at the earliest practicable time.

(4) Rule of construction: In the absence of fraud or bad faith, no
interactive computer service (as defined in section 1085(a) of title
18, United States Code, as added by this section) shall be liable for
any damages, penalty, or forfeiture, civil or criminal, for a
reasonable course of action taken to comply with a court order issued
under paragraph (2) or (3) of this subsection.

(5) Protection of privacy: Nothing in this section or the
amendments made by this section shall be construed to authorize an
affirmative obligation on an interactive computer service--

(A) to monitor use of its service; or

(B) except as required by an order of a court, to access, remove
or disable access to material where such material reveals conduct
prohibited by this section and the amendments made by this section.

(6) No effect on other remedies: Nothing in this subsection shall
be construed to affect any remedy under section 1084 or 1085 of title
18, United States Code, as amended by this section, or under any
other Federal or State law. The availability of relief under this
subsection shall not depend on, or be affected by, the initiation or
resolution of any action under section 1084 or 1085 of title 18,
United States Code, as amended by this section, or under any other
Federal or State law.

(7) Continuous jurisdiction: The court shall have continuous
jurisdiction under this subsection to enforce section 1085 of title
18, United States Code, as added by this section. (e) Report on
Enforcement: Not later than 3 years after the date of enactment of
this Act, the Attorney General shall submit a report to Congress that
includes--

(1) an analysis of the problems, if any, associated with enforcing
section 1085 of title 18, United States Code, as added by this
section;

(2) recommendations for the best use of the resources of the
Department of Justice to enforce that section; and

(3) an estimate of the amount of activity and money being used to
gamble on the Internet. (f) Report on Costs: Not later than 3 years
after the date of enactment of this Act, the Secretary of Commerce
shall submit a report to Congress that includes--

(1) an analysis of existing and potential methods or technologies
for filtering or screening transmissions in violation of section 1085
of title 18, United States Code, as added by this section, that
originate outside of the territorial boundaries of any State or the
United States;

(2) a review of the effect, if any, on interactive computer
services of any court ordered temporary restraining orders or
injunctions imposed on those services under this section;

(3) a calculation of the cost to the economy of illegal gambling
on the Internet, and other societal costs of such gambling; and

(4) an estimate of the effect, if any, on the Internet caused by
any court ordered temporary restraining orders or injunctions imposed
under this section. (g) Severability: If any provision of this
section, an amendment made by this section, or the application of
such provision or amendment to any person or circumstance is held to
be unconstitutional, the remainder of this section, the amendments
made by this section, and the application of the provisions of such
to any person or circumstance shall not be affected thereby.

(a) Prohibition and Penalties: Chapter 110 of title 18, United
States Code, is amended by adding at the end the following:

`2261. Publication of identifying information relating to a minor
for criminal sexual purposes

`(a) Definition of Identifying Information Relating to a Minor: In
this section, the term `identifying information relating to a minor'
includes the name, address, telephone number, social security number,
or e-mail address of a minor.

`(b) Prohibition and Penalties: Whoever, through the use of any
facility in or affecting interstate or foreign commerce (including
any interactive computer service) publishes, or causes to be
published, any identifying information relating to a minor who has
not attained the age of 17 years, for the purpose of soliciting any
person to engage in any sexual activity for which the person can be
charged with criminal offense under Federal or State law, shall be
imprisoned not less than 1 and not more than 5 years, fined under
this title, or both.'.

(b) Technical Amendment: The analysis for chapter 110 of title 18,
United States Code, is amended by adding at the end the following:

`2261. Publication of identifying information relating to a minor
for criminal sexual purposes.'.

(1) by redesignating subsections (d) and (e) as subsections (e)
and (f), respectively; and

(2) by inserting after subsection (c) the following new subsection
(d): `(d) Obligations of Internet Access Providers:

`(1) In general: An Internet access provider shall, at the time of
entering into an agreement with a customer for the provision of
Internet access services, offer such customer (either for a fee or at
no charge) screening software that is designed to permit the customer
to limit access to material on the Internet that is harmful to
minors.

`(2) Definitions: As used in this subsection:

`(A) Internet access provider: The term `Internet access provider'
means a person engaged in the business of providing a computer and
communications facility through which a customer may obtain access to
the Internet, but does not include a common carrier to the extent
that it provides only telecommunications services.

`(B) Internet access services: The term `Internet access services'
means the provision of computer and communications services through
which a customer using a computer and a modem or other communications
device may obtain access to the Internet, but does not include
telecommunications services provided by a common carrier.'.

`(C) Screening software: The term `screening software' means
software that is designed to permit a person to limit access to
material on the Internet that is harmful to minors.'.

(b) Applicability: The amendments made by subsection (a) shall
apply to agreements for the provision of Internet access services
entered into on or after the date that is 6 months after the date of
enactment of this Act.